Wendy's 2008 Annual Report Download - page 65

Credit Ratings
The Company’s corporate family and its senior debt are rated by Standard & Poor’s (“S&P”) and Moody’s
Investors Service (“Moody’s).
On March 2, 2009, S&P lowered its rating on the prior Arby’s Credit Agreement to B and its corporate
family rating on Arby’s to B-. At the same time, S&P placed the rating on CreditWatch—Developing. S&P is
in the process of reviewing the amended and restated Credit Agreement. New corporate family and senior
secured ratings are expected following the completion of the review.
On March 3, 2009, Moody’s affirmed (i) a B1 rating for the prior Arby’s Credit Agreement, (ii) a B2
corporate family rating for Arby’s and (iii) a negative outlook for Arby’s. Moody’s is in the process of reviewing
the amended and restated Credit Agreement. New corporate family and senior secured ratings are expected
following the completion of the review.
The Wendy’s 6.20% and 6.25% Senior Notes and 7% Debentures are rated as B+ by S&P and B2 by
Moody’s.
There are many factors that could lead to future upgrades or downgrades of our credit ratings. If our
credit ratings are upgraded or downgraded, it could lead to, among other things, changes in borrowing costs
and of access to capital markets on acceptable terms.
A rating is not a recommendation to buy, sell or hold any security, and may be subject to revision or
withdrawal at any time by the rating agency. Each rating should be evaluated independently of any other
rating.
Treasury Stock Purchases
Our management was authorized, to the extent market conditions warranted and as legally permissible, to
repurchase through December 28, 2008 up to a total of $50.0 million of our class A common stock. Under this
program, we did not make any treasury stock purchases during 2008, and we have not renewed this program
for 2009.
Purchase of Indebtedness
Subject to market conditions, our capital needs and other factors, we may from time to time repurchase
our indebtedness and/or the indebtedness of our subsidiaries, including indebtedness outstanding under the
ARG Credit Agreement, in open market or privately negotiated transactions. During 2008, we repurchased
$10.9 million principal amount of our subsidiaries’ indebtedness, as discussed above under “Long-term Debt.”
Sources and Uses of Cash for 2009
Our anticipated consolidated cash requirements for continuing operations for 2009, exclusive of operating
cash flow requirements, consist principally of:
•Cash capital expenditures of approximately $140.0 million as discussed below in “Capital
Expenditures”;
•Quarterly cash dividends aggregating up to approximately $28.0 million as discussed below in
“Dividends”;
•Scheduled debt principal repayments aggregating $30.4 million;
•Severance payments of approximately $11.2 million related to our previously announced Wendy’s
merger integration programs and our facilities relocation and corporate restructuring accruals; and
•The costs of any potential business acquisitions.
We expect to meet these requirements from operating cash flows. In the event operating cash flows are
not sufficient, the availability under the amended and restated Credit Agreement is anticipated to provide
sufficient liquidity to meet cash flow requirements.
In addition, the $47.0 million released from the Equities Account to Wendy’s/Arby’s in 2008 is required
to be returned to the Equities Account in January 2010.
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